Its a layer, it has different persumptions and provides different features. It is a final settlement, given the assumptions of lightning the bitcoin in the channel is owned by whoever has it in their balance, theres no need for a layer 1 transaction to take custody of it because its not in your counterparties vault, its in a channel with an enforceable claim; layer 1 transactions will be relegated to shifting liquidity, not final settlement. Maybe that doesnt provide the space for 8 billion lightning nodes, which most people are never going to run anyways, but it does provide room for millions/tens of millions of lightning nodes. I know you want a perfect digital bearer asset that can be sent like a text message without counterparty risk or scaling issues, with perfect security and privacy, that is absolutely scarce like bitcoin with google level UI, and I know you want it yesterday, but 1. Monero provide that either and never will, and 2. this is a problem thats plagued humanity for millenia and we are going about as fast as we can, so strap in.
Discussion
As long as you have an active node and channel state backups or trust another person to do it. The potential to be rugged by your peers or channel host is always there after you make a transaction. This caveat doesn't exist for L1. Once the transaction is sufficiently confirmed you can't be rugged. It is final. Maybe there is a different term for it.
Worse, in practice, most lightning users don't even use it this way. They use it custodially.
I'm willing to entertain trade offs. But we're throwing away major value props of Bitcoin for scalability. The few things that differentiate it from fiat.
Defeats the whole purpose.
Once funds are received by lightning they cant be rugged unless you are using a custodial wallet or your node is disconnected for an extended period, which even then can be mitigated by watchtowers keeping an eye on your peer issuing an old channel state. Different terms for things, yea, I think the way a lot of this is playing out pushes our understanding of how money works to ite limits, I really dont think layer 1 should be considered settlement, it works today for those purposes but everyone using bitcoin today could be using lightning self custodied today as well, as it scales into the future I think l1 will be unusable for anything but moving liquidity and we will call lightning transactions as settlements.
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1. Then it wont be a problem, but its unlikely fiats will be favored by the masses over time judging by their trajectory.
2. Yes, that would be the conclusion of praxeological economics when studying money by hardness through history, when cultures collide the one with the harder money is able to outproduce the weaker money and trade it away in exchange for all the goods of the culture with the weaker money.
3 and 4 are somewhat condradictory on the axis of arbitrariness. I am not inherently against a different model for block sizes, but that should take effect after we have layer 1 perfected, and determining a block size that supports transaction fees without overly constroctong activity seems like a tough question.